Walter Hamilton. The ABC and its competitors

Nov 23, 2014

When the British conducted atomic tests at Maralinga in South Australia in the 1950s Australia’s newspaper proprietors tried to prevent the ABC bringing along its recording equipment to capture the event. They wanted the ABC locked out of the story because it would steal their thunder: how could a printed article about an atomic explosion compete with sound and vision? The national broadcaster appealed for help to Prime Minister Menzies who ruled that the ABC had the right to be there.

There was a time, of course, in the 1930s, when the ABC news consisted of a radio presenter reading extracts from newspapers; an independent national news service was still a thing of the future. Observing today’s multifaceted and well-resourced ABC it’s easy to take the status quo for granted. We should, however, never underestimate the historical resentment felt by commercial media owners toward the ABC’s power to erode their market share.

I should state up front that I do not believe the announced 4.6% cut in the ABC’s budget heralds its demise as an effective public broadcaster. A proportionally bigger cut by the Howard Government had to be absorbed in 1996-98, when the ABC’s revenues from government were around $575 million per annum compared with $1.04 billion today (after the latest cut). Since the budget low-point in 1998, revenues have risen by almost 30%, after taking inflation into account––though services have also expanded*. So, while the cut will hurt, if well managed it should not threaten core activities. The corporation has expanded into many new areas in recent years, during which time its budget has increased significantly. In the period ahead it will need to consolidate and re-examine priorities.

Having said this, I have no doubt that, along with the stated fiscal imperative, ideological factors influenced the government’s decision. Over the past year, the Abbott Government has on several occasions publicly condemned the ABC for its coverage of asylum seekers and relations with Indonesia, for instance. There is a discreet way for a government, through the relevant minister, to make its views known on the corporation’s performance; by reaching for the bullhorn, the prime minister and others knew that while they were unlikely to change the ABC they would surely isolate it and damage its credibility. The decision by Foreign Affairs in June to drop its contract with the ABC’s Australia Network international television service followed years of lobbying by Rupert Murdoch’s Sky News, backed by relentless attacks from News Corp’s in-house commentators. If the present government had a firm ideological commitment to public broadcasting it would not have conducted itself in the way it has nor applied the cuts it has.

At the heart of this debate, however, is not a broken election promise, as egregious as that is, or even the political colour of the parties in power. Heaven knows, past Labor Governments have not held back from savaging the ABC when it got under their skin. Since 1998, funding of public broadcasting in Australia (SBS and ABC) has fallen as a percentage of GDP from 0.162% to 0.102%, during a period in which conservative federal governments held office for 10 years and Labor for six. No, for me, at the heart of the debate is marketplace competition. It was the case in 1956, when the newspapers tried to stop the ABC covering a major news event; it remains the case today.

The former media writer at the Australian newspaper, Amanda Meade, stated in the Guardian online two years ago: “Attacks from News Corp papers, in particular from the Australian, are now so frequent that there can be no pretence the paper is running anything but a campaign. Where anti-ABC material once might have been found on the comment pages, now it seems to be reported as news, despite some stories having little news value.” In my opinion, the same thing could have been said at least 10 years ago. Back then News Corp journalists would privately joke that it was permanent “open season” on the ABC; during editorial meetings it was always good for a bashing. This could only mean the reporters knew they would never be pulled up by the boss no matter how hard they put the boot into Auntie.

Rupert Murdoch has made his views clear: why should commercial operators, who must raise their own funds and answer to shareholders, have to compete head-to-head with a publicly funded entity that does not need to turn a profit? It goes against his grain––and he is far from being alone in this within corporate and political circles. When the media market was reasonably stable, from the 1960s to the early 1990s, when newspaper sales were strong and before television and radio audiences began drifting off to the Internet, this represented mainly a philosophical objection. Now, as the entire media landscape is shifting, and the ABC has moved inexorably into the new digital markets where Murdoch and the other proprietors are scrambling to establish a presence, the commercial stakes are higher than ever before.

When television was king, viewers did not have to pay to switch to a commercial network; the advertising revenues were enough. For their online news sites, however, Murdoch and the others need Internet users to pay up front. Will consumers do so in sufficient numbers when they can access the ABC’s (or BBC’s) site for free, and get all the other digital add-ons (podcasting, streaming, etc.) for free? You only have to commute by train in a big city to observe how many travellers are reading the free newspaper versus those reading one they paid for.

As much as I want the ABC to survive and thrive, we need to concern ourselves too with the collapse of the business model for commercial news media organisations. If the ABC exists, in part, to preserve media diversity and provide services that others neglect, it follows that we should desire healthy and fair competition. Of course, one might ask, why should the ABC care if the competition is hurting? The answer I believe is, “always study your opponent”.

The advent of new digital platforms has changed the competitive relationship between the ABC and its commercial rivals. Some foresee a battle to the death in which big players like Rupert Murdoch will use friendly governments to emasculate the competition. I am not among the pessimists. I know, from experience, how much politicians of all stripes like appearing on the ABC and how important the public broadcaster is to a lively cross-section of Australian voters. But something will have to give in the media fairground, where some of the attractions are apparently free and some are not. I say “apparently” because the ABC does come at a cost, even if the sums are generally buried away in the national accounts. It survives, in a sense, through a compulsory levy on the taxpayer.

I wonder whether the time has come to reopen the debate about the funding method for maintaining the ABC and whether all its services, regardless of the cost, should be available without any “user-pays” restrictions. Whatever side of the fence one sits, it could only help to focus the arguments and nourish the public debate.

*These and other figures were taken from ABC and SBS annual reports and Bureau of Statistics releases and used the Reserve Bank inflation calculator. By way of comparison, government revenues to the Defence Department rose by 45% above inflation between 1998-99 and 2013-14, according to the department’s annual reports. The defence budget represented 1.9% of GDP in 1998 compared with the current 1.8% (where it’s projected to remain through 2017).

Walter Hamilton worked at the ABC for 33 years.



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